Excellus made $44 million profit in 2010, ending two years of losses

Syracuse, NY -- Excellus BlueCross BlueShield made a $44.5 million profit in 2010, when it ended two straight years of operating losses, the health insurer reported Tuesday.

Excellus had a profit of nearly 1 percent on its revenues of $5.2 billion in 2010, the company reported to the state. After two years of operating at a loss on the revenue it generated from premiums, the company last year made a $33 million profit on premiums. That's 0.6 percent of its premium income.

Most of the company's profit came from $69 million in investment income, Excellus officials said.

The insurer reported its finances Tuesday in its annual filing with the state Insurance Department. The report showed Excellus paid 53 employees more than $200,000 last year.

Its top three executives took pay cuts of 3 percent to 5 percent -- the second year in a row of salary decreases for top officers. The cuts were because of the company's financial performance in recent years, Excellus said in a news release. The company lost $54 million in 2008.

After a decrease in members in 2009, Excellus reported an increase of 100,000 members last year for a total of 1.8 million. As a result, the company's medical and hospital expenses increased from $4.3 billion in 2009 to $4.6 billion last year. The company's administrative costs totaled $578.5 million last year -- a 1.8 percent increase.

Excellus must put its net income, or profit, into reserves because the company is a nonprofit. That gives the company a safeguard against spikes in expenses or declines in revenue. The company's health plan reserves totaled $1.09 billion at the end of 2010, its filings said. That works out to $709 in reserves per member, the company said.

The average for nonprofit health plans in Upstate New York is $1,058 per member in reserves, the company said. Although it's below the Upstate average, Excellus' reserves level is at a "safe and adequate level," Duda said in a news release. "Our members can feel confident that we are financially strong enough to cover them, even in the event of a catastrophe," Duda said.

In October, the state Insurance Department approved Excellus' request to increase its health insurance policy rates between 5.4 and 12.5 percent.

Excellus, based in Rochester, employs 6,000 workers in 30 offices across Upstate New York, including about 950 in Central New York. The company processed more than 49 million claims last year, paying $4.6 billion to 18,000 Upstate physicians, 130 hospitals and 61,000 pharmacies.